Explore Your R&D Tax Credit Eligibility

Tax Credit Network brings together professionals focused on helping businesses identify and pursue valuable tax credit opportunities. In partnership with Tax Prep Advocates, we provide access to specialized expertise across eligibility review, qualification, documentation, and the claiming process.

Our goal is to make it easier for businesses to understand which programs may apply and connect them with the appropriate resources to move forward.

Eligibility depends on the activities your business performs and its tax position. Businesses involved in developing or improving products, processes, software, formulas, techniques, or other technical solutions may have qualifying activities.

Certain startups and newer businesses may also be able to apply eligible R&D credits against qualifying payroll tax liabilities, while other businesses may use the credit against income taxes where eligible.

Potentially. Qualified small businesses may be able to apply eligible R&D tax credits against certain employer payroll tax liabilities rather than income tax.

Eligibility depends on factors such as gross receipts, how long the business has generated revenue, qualifying research activity, and applicable filing requirements.

Qualifying R&D can include work performed while developing or improving products, processes, formulas, software, techniques, or technical capabilities.

Examples may include:

• Creating improved products, processes, formulas, software, and techniques
• Automating or improving internal manufacturing processes
• Designing tools, jigs, fixtures, and molds
• Integrating new equipment
• Network hardware and software development and optimization
• Mobile application development
• Internet of Things (IoT) development
• Development of data center, big data, and data mining tools
• Integration of APIs and other technologies
• Manufacturing new or improved products
• Developing prototypes, first articles, and models
• Evaluation of alternative materials
• Development of firmware
• Developing simulators

Actual eligibility depends on the nature of the work and whether it meets applicable R&D tax credit requirements.

The value of an R&D tax credit depends on the type and amount of qualifying research expenses and the company's specific tax situation.

As a general reference, credits may represent approximately 5%–15% of qualifying R&D costs in some situations, but actual results vary significantly.

No specific credit amount or tax savings is guaranteed.

Potentially. Eligible businesses may be able to amend prior income tax returns to claim qualifying R&D credits, subject to applicable amendment periods and filing requirements.

Payroll tax credit elections for qualified small businesses have different rules and should be evaluated separately.

Tax Prep Advocates provides audit support with qualifying R&D studies. Specialists can assist with the technical and financial documentation prepared as part of the study and provide support related to the R&D credit calculation and underlying qualifying activities.

Yes. Many states offer their own R&D or research-related tax incentives in addition to the federal credit.

Eligibility, calculations, refundability, carryforward rules, and other requirements vary by state. Tax Prep Advocates can provide guidance on applicable state-level opportunities where relevant.

An R&D study helps determine the potential credit amount while creating the technical and financial documentation supporting the claim.

Simply completing the applicable tax forms may not provide the level of documentation needed to substantiate qualifying research activities and expenses during an examination.

Yes.

You can continue working with your existing CPA, accountant, or tax preparer. Tax Prep Advocates can calculate the R&D credit, prepare supporting documentation and filing instructions, and coordinate with your existing tax professionals as needed.

Depending on the engagement, Tax Prep Advocates can assist with:

• Identifying and calculating qualifying research expenses
• Preparing applicable Forms 6765 and 8974
• Preparing technical and financial documentation
• Coordinating with your tax preparer, accountant, or payroll provider
• Helping apply the applicable credit
• Providing email and phone support throughout the process

Tax Prep Advocates offers an Accurate Calculation Guarantee for qualifying R&D studies, covering calculations up to $1 million against errors in the study.